First-time home buyer guide
The essentials, down payment, insurance, pre-approval and programs, without the jargon.
Your first mortgage feels overwhelming because of the vocabulary, not the math. Here is the short version that covers most of what first-timers need.
The down payment
Canada requires at least 5 percent on the first $500,000 of price, with default insurance below 20 percent down. The US allows conventional loans from around 3 percent, with low-down-payment and government-backed options. A larger down payment lowers your payment and can remove insurance.
Get pre-approved first
A pre-approval sets your real budget, often holds a rate for 90 to 120 days, and signals to sellers that you are serious. Do this before you start viewing homes so you shop in the right range.
Budget below your ceiling
Approval is a maximum, not a recommendation. Reserve room for closing costs, moving, repairs, and the likelihood that rates and life will change. Buyers who stretch to their limit are the ones most exposed at renewal.
Check current programs
Both countries run first-time buyer incentives, registered savings accounts, and tax credits that change frequently. Look up the current government programs for your province or state before you buy.
Frequently asked questions
How much down payment do first-time buyers need?
In Canada, a minimum of 5 percent on the first $500,000, with mortgage insurance required below 20 percent down. In the US, conventional loans can start near 3 percent, and some programs lower it further.
What is mortgage default insurance?
In Canada, if you put down less than 20 percent, you must pay mortgage insurance (CMHC or private) that protects the lender. In the US, the equivalent is PMI, which can be removed once you reach 20 percent equity.
Should I get pre-approved?
Yes. A pre-approval tells you your budget, locks a rate for a period, and makes your offers stronger. Get it before house hunting.
Are there first-time buyer programs?
Both countries offer incentives, tax credits, savings accounts, and assistance programs. They change often, so check current government programs for your region.
What is the biggest first-timer mistake?
Buying at the absolute maximum approval and forgetting closing costs, maintenance and rate changes. Budget below your ceiling.